The Spectator interviews Michael Lewis on the 2008 financial crisis.
The author of The Big Short weighs in:
“Not nearly enough has been done — the regulatory response has been totally inadequate. The big banks have blocked serious reforms, meddling in the process so incentives haven’t changed enough to attack the heart of the problem — which is why it could happen again.”
“We still have the same short-term-oriented compensation, the same big bonuses at year-end…”
“I’ve never gotten over the feeling when I learnt Goldman Sachs had designed securities that would fail, so they could then short them.”
“The 1997 repeal of the Glass-Steagall Act was part of the problem  but it goes back even before that. The earlier transformation of investment banks into public corporations was a big mistake — with bankers using shareholders’ money to bet, rather than their own.”
“It isn’t just the big campaign contributions. Anyone at the table talking about financial reform is a potential hire and likely to end up working in the financial sector for huge sums, so they get captured.”
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